Why Florida Foreclosure Is Ugly

It's all over the news: banks rushing to foreclose and consumers turning to the courts as a last resort before their homes are snatched away without due process. As Daily Finance's Abigail Field points out in this well-researched piece, some states are working hard to protect consumers: Not Florida. Florida still seems to be helping banks grab foreclosed properties faster than you can say "rocket docket." Here's how:

In the face of banks' rampant disregard for the law in pursuing foreclosures with false paperwork, the judiciary has started to emerge as the great defender of due process and the rule of law.

For example, in October, New York put an end to the fraudulent document problem in its courts. Some Ohio courts started making similar efforts. And on Monday, New Jersey put in place rules to end document fraud in its system. New Jersey also called out major banks and demanded they affirmatively demonstrate that their foreclosure procedures are sound. This list of judges standing up for the system is hardly exhaustive.

In each case, the judges made clear they weren't picking sides. They were merely enforcing the rules, making sure the banks didn't get special exceptions unavailable to anyone else.

Unfortunately, not all judges are responding to the foreclosure mess this way. Those in Florida have been particularly notorious, and new rulings show at least some members of the Florida judiciary seem more committed to speeding foreclosures through to completion than anything else.

1. Plaintiff seeks this stay in order to allow time for the completion of a review of its mortgage servicing procedures. That review was commenced following nationwide reports of certain industry-wide deficiencies in the preparation of affidavits submitted in connection with foreclosure proceedings.

2. Plaintiff intends to take all necessary steps in order to ensure that the documentation provided in connection with foreclosure proceedings, including this one, meets all applicable legal requirements.

SunTrust is saying: Judge, we respect the court system and want to do things right. Please give us the time we need.

By denying the motion, the judge (I can't tell who signed it) essentially responded: Don't bother. I don't care if your papers were right. Just hurry up and take the house.

Once Started, Can't Stop

T. John Costello Jr., the attorney for the homeowner in this case, said the motion denial isn't the worst thing he's experienced in Lee County. The worst, he said is the practice of judges deciding foreclosures are ready to go to trial at "docket soundings" -- when even the bank isn't ready:

I attended a docket sounding on Friday, and the judge set over 100 cases for trial on Feb. 3. I informed the judge that the bank's attorneys (who failed to show up) had previously told me that my case was on administrative hold. His response was: "That may be, but it isn't on hold with us." He set the case for trial. I doubt the bank will be ready.

Or consider this court order, in which Lee County Judge James Thompson straightforwardly exempts the bank from following a rule that applies to everyone else (specifically, part [e]). That rule requires affidavits to be based on personal knowledge, state facts that would be admissible as evidence at trial and, of particular importance in this instance, ". . .all papers or parts thereof referred to in an affidavit shall be attached thereto."

As the motion that triggered this order exempting banks from following the rules explains, the affidavit in the case was signed by infamous robo-signer Xee Moua, making it hard to believe the affidavit complies with the part of the rule requiring personal knowledge. Moreover, none of the records that Moua's affidavit said she reviewed were attached to it. Since the homeowner says he made four $900 payments that weren't credited by the bank, actually seeing the documents Moua "reviewed" would be useful, even if they weren't required by the rule that apparently doesn't apply to banks foreclosing in Lee County.

The clerk of courts for Lee County, Charlie Green, told Fox4 in Florida: "We have not required, in the past, nor do I think we will, to have copies [of those documents] attached. It's not mandatory." Not mandatory, except of course, for everyone required to follow the rules about affidavits. The rule itself couldn't be more clear.

Unintended Consequences

In short, Judge Thompson's order says the bank can foreclose using "evidence" that no one else can. Green's comment says that in Lee County, the banks don't have to play by the rules.

Todd Allen, the attorney for the homeowner in that case, points out ironically that Lee County judges' rush to foreclosure slows things down rather than speeds them up:

Collier County has been very successful managing its docket and still manages to follow the rule of law, but let me add some perspective to that statement.

I have three times the number of foreclosure clients in Collier County than I have in Lee County. However, I spend twice as much time in Lee County court than I do in Collier County.

I think the fact that Lee County is moving at such an accelerated rate and is ignoring the basic rules creates more problems for them. Which in turn requires more hearings, which is where the rules are ignored. It's a vicious cycle. Cutting corners in this process will create problems in the title to these properties, and the County will have another wave of problems where owners are trying to clean up title issues.

Admittedly, this order seems to be something of an outlier. Other Florida judges have rejected summary judgment motions because the foreclosing bank's papers weren't in order.